B.Riley FBR Thinks Just Energy Group Inc’s Stock is Going to Recover

B.Riley FBR analyst Carter Driscoll maintained a Buy rating on Just Energy Group Inc (NYSE: JE) today and set a price target of $6.25. The company’s shares closed yesterday at $4.44, close to its 52-week low of $4.43.

Driscoll said:

“Disappointing weather in F2Q, likely persists into F3Q. Last week, Just Energy reported very weak F2Q results, with C$20.5M in base EBITDA, far lower than our expected C$46.9M, due largely, but not entirely, to cooler-than-expected weather and the effects of Hurricane Harvey across much of its service territory. We see the mild weather and low commodity prices lasting into F3Q, which, we believe, are among the main reasons that management lowered its FY18 base EBITDA guidance, from C$210M–C$220M, to C$175M–C$195M, an approximate 14% drop at the midpoint. The company did not have hedges in place for the mild weather, as they are not cost effective. International markets again showed good progress as the UK exceeds expectations and early inroads into Ireland materialize. We are also encouraged by the expansion of retail store channels that can restart customer growth and hold margins near, and potentially above, recent historic highs.”

According to TipRanks.com, Driscoll is a 1-star analyst with an average return of -2.9% and a 37.1% success rate. Driscoll covers the Industrial Goods sector, focusing on stocks such as Ballard Power Systems, Amer Superconductor, and P10 Industries Inc.

Currently, the analyst consensus on Just Energy Group Inc is Moderate Buy and the average price target is $8.13, representing an 83.1% upside.

In a report issued on November 10, H.C. Wainwright also assigned a Buy rating to the stock with a $10 price target.

Based on Just Energy Group Inc’s latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $680 million and GAAP net loss of $54.94 million. In comparison, last year the company earned revenue of $761 million and had a GAAP net loss of $128 million.

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Just Energy Group, Inc. engages in the sale of natural gas and electricity to residential and commercial customers under long-term fixed-price, price-protected or variable-priced contracts and green energy products. It specializes in electricity, natural gas and solar and green energy.